Life Science Compliance Update

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April 14, 2017

Grassley Seeks Answers from EpiPen Competitor

O-CHUCK-GRASSLEY-VAWA-facebook

In early March 2017, Senator Chuck Grassley sent a letter to the manufacturer of Auvi-Q (an epinephrine injector similar to EpiPen), requesting an explanation of its pricing, including which entities within the health care system pay the cited list price of $4,500 for a two-pack when consumers without insurance pay $360 for the product.

Kaléo said that as a part of its Auvi-Q AffordAbility program, patients with commercial insurance will pay nothing out-of-pocket. For patients without insurance and a household income of less than $100,000, Auvi-Q will be made available free of charge, according to the company.

Each prescription includes 2 auto-injectors and a training device. The Auvi-Q features voice instructions to guide users through the delivery process and an automatic retractable needle system, which Kaléo touts as a 1st for epinephrine auto-injectors.

“We met with patients and physicians and listened to the very real challenges in the current healthcare environment with obtaining access to affordable medicines,” president & CEO Spencer Williamson said in prepared remarks.  “As a result, starting Feb. 14, for more than 200 million Americans with commercial insurance, including those with high-deductible plans, the out-of-pocket cost for Auvi-q will be $0.”

“We know how important it is that severely allergic patients have an epinephrine auto-injector that can be with them at all times and used correctly, even without training, during a panic-stricken allergic emergency,” VP of product strategy Dr. Eric Edwards added. “We are excited to make Auvi-q, an epinephrine auto-injector with innovative features, available for millions of patients living with severe, life-threatening allergies.”

“Kaléo has offered various patient support programs in an effort to ensure that some patients pay effectively nothing for the Auvi-Q,” Grassley wrote to Spencer Williamson, president and chief executive officer of Kaléo Pharmaceuticals.  “However, your pricing structure may simply shift the burden and cost to another entity within the health care system. With respect to your choice of price, a number of insurance companies and pharmacy benefit managers do not support the strategy and have stated they will not be adding the Auvi-Q to their list of covered medications.”

Grassley asked a series of questions to understand the pricing decision-making, including:

  • Why the company is charging $4,500 for a two pack, and requesting an explanation of their decision-making process in terms of charging that price and whether patient accessibility and research and development were considerations;
  • How much Kaléo spent on R&D for the drug;
  • Whether any entity in the health care system will have to pay $4,500, and if so, which entity; and
  • How the pricing structure will result in reduced prices to the consumer.

Reminiscent of EpiPen

Grassley began looking at EpiPen’s pricing last year after Iowans raised concern to him about high prices for the product. The EpiPen maker, Mylan, gave an incomplete response to his inquiry. Grassley continues to the press the federal government on the misclassification of EpiPen under the Medicaid Drug Rebate Program, which resulted in overcharges of potentially hundreds of millions of dollars to states and taxpayers. President Trump’s nominee to lead the Centers for Medicare and Medicaid Services pledged to produce records on the misclassification. Grassley requested those records from the Obama Administration, which claimed it took action on the problem, to no avail. 

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